Cypress Development's flagship 1,520 acre Clayton Valley Lithium Project, totaling 76 placer/lode claims, is located in the heart of the Clayton Valley lithium exploration area of Esmeralda County, State of Nevada, USA.
Cypress' Clayton Valley Lithium Project is located on the south flank of "Angel Island" and immediately southeast of the Albemarle (NYSE: ALB) Silver Peak Lithium Mine. Cypress' claims share their western boundary with claims controlled by Pure Energy Minerals (TSX-V: PE) who have identified an inferred lithium brine resource at their Northern Resource Area (see Pure Energy's news release July 28, 2015) located to the immediate west of Cypress' property boundary. The lithium brines being produced for almost 50 years at the Silver Peak Mine have come from the flanks of Angel and Goat Islands.
Cypress' highly prospective "Glory" and "Angel" claims are located within a 0.5 mile (<1000m) southeast of current and past producing lithium brine wells belonging to the Albemarle Silver Peak Mine. Cypress' Clayton Valley Project is located in an active area of lithium mining and lithium exploration. Highways and electric power are in place and exploration resources needed are readily accessible.
Cypress has reviewed the seismic data in the Pure Energy (TSX-V: PE) NI 43-101 Technical Report titled "Inferred Resource Estimate for Lithium, Clayton Valley South Project", dated July 17, 2015. The data appears to indicate favorable lithium brine exploration targets along the western and west central portions of Cypress' Clayton Valley property.
Other first order targets exist on Cypress' Clayton Valley property including the discovery of extensive surface outcropping of altered green lithium-rich claystones, that are not hectorite, found during 2016 exploration and the presence of stockwork veining at paleo hot spring vents. These outcropping claystone exposures likely represent uplifted portions of the stratigraphy within which the lithium brines of the basin are found and produced from.
The lithium-rich outcropping claystones could possibly overlie lithium-rich brines at a shallow level at Cypress' Clayton Valley Project. The core lands cover the immediate eastern extension of Pure Energy's identified lithium brine Northern Resource Area. The Company believes that lithium-rich brines could be localized at the water table below the highly mineralized claystones discovered at Cypress' Clayton Valley property and potentially along structures cutting these units.
The Albemarle Silver Peak Mine is the only operating brine based lithium carbonate mine in North America. The Silver Peak Mine began operations in 1967 to mine lithium carbonate by low cost evaporation ponds and has produced lithium carbonate since then. The concentration in the production brines were reported in 2001 to average 160 ppm (160 mg/litre) lithium carbonate (Garrett Report, 2004). Concentrations in the brines in Clayton Valley have been relatively consistent in the 150-200 ppm (150-200 mg/litre) lithium carbonate in recent history. The brines from the north part of the Clayton Valley are sodium/chloride (Na/Cl) in composition and have concentrations in the range of 60-400 ppm (60-400 mg/litre) lithium carbonate.
*NOTE: 100 ppm lithium metal (Li) is equivalent to 532 ppm lithium carbonate (Li2CO3).
Clayton Valley is located within the Basin and Range Province in southern Nevada and is an internally drained, fault bounded, and closed basin. Basin filling strata compose the aquifer system which hosts and produces the lithium-rich brine. (Zampirro Report 2004).
The Silver Peak area is one of the oldest mining areas in Nevada having produced substantial amounts of silver, gold, lithium and other minerals.
2016 Exploration Results at Cypress' Clayton Valley Lithium Project:
Cypress has interpreted available historic geophysical data of the Clayton Valley, including reconnaissance gravity survey and seismic reflection survey data. Reconnaissance gravity surveys gave a better understanding of the size and extent of the basin and the depth to bedrock on Cypress' Angel and Glory claims. A seismic reflection survey helped define location and extent of bounding and in-basin faults, identify depth to bedrock, and identify and trace key stratigraphic horizons laterally and vertically throughout the basin.
Phase 1 surface sampling of green to bone white claystones was completed at Cypress' Clayton Valley Project at the end of January 2016 in an area within the northwest portion of the property on the west flank of Angel Island. Angel Island is one of several isolated exposures of highly deformed and metamorphosed rocks of Cambrian age that are surrounded by basin fill evaporite rocks herein referred to as the "claystones". These claystones are not well understood in terms of age but are definitely part of the recent basin fill evaporite rocks of the Clayton Valley and are thought to be less than two million years old based on work completed by the USGS and other research geologists. These exposures likely represent uplifted portions of the stratigraphy within which the lithium brines of the basin are found and produced from.
Cypress' January 2016 Phase 1 sampling program returned the highest reported assay result for lithium in claystones known by the Company to be publicly reported in Nevada's Clayton Valley history. Several of the assays carried greater than 2,000 ppm lithium (Li) with one assay sample returning a grade of 3,070 ppm lithium (Li) content. The assay results encountered suggested a strong possibility of an essentially continuously mineralized volume of lithium-rich claystones at surface over extensive portions of Cypress' Clayton Valley property.
2016 Phase 1 results of systematic surface sampling of claystones are displayed in Tables 1 and 2 below.
Table 1 lithium (Li) numbers are from samples randomly collected along the contact of the Cambrian age rocks and the basin fill claystone evaporite rocks. Table 2 lithium (Li) numbers are from samples of the Cambrian rocks above a complex contact with the topographically lower claystones.
Table 1: Random Surface Claystone Assay Results
A second series of samples were systematically collected from an approximate 300 foot wide traverse through the claystones starting at first exposure on the basin side gravel-claystone contact (west) and ending at a brecciated vertical fault contact of the claystones with the Cambrian rocks of Angel Island (east). The samples were collected at an approximate spacing of 25 feet. Assay results of these samples are displayed in Table 2 below.
Table 2: Traverse Surface Claystone Assay Results
*NOTE: K=Potassium, Li=Lithium, Na=Sodium, Mg=Magnesium, P=Phosphorus, Sr=Strontium,
ppm=parts per million, 1 ppm=1 milligram per litre, kg=kilogram
2016 Phase 1 assays from the systematic traverse samples average >1,500 ppm lithium (Li) and are accompanied by a typical suite of other evoporite rock mineralization including one sample with >1% strontium (Sr). Cypress had discovered high lithium grades at surface that well exceeded other reported Clayton Valley sediments and brines.
The Phase 1 assay results suggested the strong potential of an essentially continuous mineralized volume of lithium-rich claystones at surface at Cypress' property in a position immediately east of both brine production wells at the Albemarle Silver Peak Mine and the Northern Resource Area of Pure Energy's Clayton Valley South project.
Cypress immediately moved forward with a more extensive 2016 Phase 2 exploration program at its Clayton Valley Project to better define this lithium-rich surface mineralization discovered during the Phase 1 sampling program. The Company has carried out 2 kilometers of detailed surface sampling and geological mapping in the first 2 quarters of 2016 over the western portion of Cypress' Clayton Valley property.
Cypress' May 2016 Phase 2 results from over 200 samples collected shows the discovery of a wide 2 kilometer north-south strike zone of outcropping mineralized claystones that assayed 1,100 ppm lithium (Li) on average and includes a 1.0 kilometer discovery zone that assayed 1,350 ppm lithium (Li) on average.
The outcropping lithium-rich claystones discovered at Cypress' Clayton Valley property are believed to represent uplifted portions of the stratigraphy within which the lithium carbonate brines of the basin are found and produced from.
Lithium Leach Results from Mineralized Claystones on Cypress' Clayton Valley Project:
A number of 2016 Phase 2 sample pulps were re-assayed by ALS Chemex by both a pure deionized water leach and a weak Aqua Regia (weak acid) leach to provide further data on the potential feasibility of large-scale leach extraction methods of lithium from the mineralized claystones. The goal of this work was to substantiate the potential to produce lithium directly from the mineralized claystones with a low cost and environmentally friendly approach without the need for roasting or other costly mining and complex treatments.
47 samples were selected for the lithium (Li) leach test from over 200 collected during Cypress' Phase 2 program. The 47 samples previously averaged 1,334 ppm (Li) and cover 2 kilometers of strike length of the exposed mineralization. The 47 samples assayed an averaged of 1,276 ppm (Li) using the weak acid leach method. The leach test results for extracting lithium directly from the claystones show an impressive average of 95% (Li) recovery using the weak acid method. The table below shows previously assayed samples when re-assayed using the weak acid leach method for percentage lithium recovered.
Lithium Leach Extraction Results from Mineralized Claystones
*NOTE: To convert Lithium Metal (Li) to Lithium Carbonate (Li2CO3) multiply Li by 5.323
The data confirms the discovery of a readily soluble non-hectorite mineral form of lithium, with grades that well exceed other Clayton Valley sediments and brines, has been found at surface over wide areas of Cypress' Clayton Valley property. The lithium-rich mineralization is contained within calcareous evaporite rocks, dominantly carbonate rich lake-bed claystones with interbedded volcanic ash units.
Cypress is moving forward at this time with mineral Identification (ID) by X Ray Diffraction (XRD) being conducted at the University of British Columbia. The Company is further advancing bench scale studies of using a plain water, non-acid leach and additional very dilute acid leach methods in an advancing effort to develop a low cost mining and environmentally friendly lithium (Li) extraction method for the claystones at Cypress' Clayton Valley Project.
2016 Phase 3 Drill Program at Cypress' Clayton Valley Lithium Project:
Cypress Development has prepared an exploration budget for 2016 and has made preparations for a Phase 3 drilling program including reverse circulation ("R-C") holes to sample the extension to the east of the Pure Energy's lithium brine Northern Resource Area as described in their Clayton Valley South project NI 43-101 Technical Report, July, 2015. The Company has received a drilling permit from the BLM, Nevada covering a planned drill program targeting lithium brines at Cypress' Clayton Valley Project and shallow holes targeting the wide areas of lithium-rich claystones discovered at surface.
The drilling permit contains proposed R-C drill hole locations targeting potential lithium-rich brines within the Main Ash Aquifer projected to underlie the west and west-central portions of Cypress' Clayton Valley Project. The Main Ash Aquifer is the primary target of the R-C holes. Cypress expects to intersect this zone at 500 to 1,000 feet below surface. Additional deeper targets will also be tested including the potential presence of a coarse gravel aquifer near the base of the basin fill evaporite sequence.
The drilling permit also contains proposed locations for a number of shallow auger holes targeted to provide initial subsurface data and assays under the wide areas of strongly mineralized salty claystone outcrops. This shallow drilling should allow Cypress to begin to estimate size, lithium (Li) grade and tonnage in the claystones at the Company's Clayton Valley Project. The auger holes will be sampled on composite 5 foot intervals.
The exploration results received by Cypress to date are being viewed as highly encouraging for the potential of a continuous volume of a highly leachable form of lithium-rich claystone at surface at the Company's Clayton Valley Project. The results are also being viewed as highly encouraging for the discovery of lithium-rich brines in the aquifers below, next door to successful lithium brine exploration and production.
Mining Infrastructure in Clayton Valley, Nevada:
• Well maintained state highways connect Silver Peak to the main road network in Nevada
• Nevada has fostered a thriving mining industry with associated development expertise, construction and operations services and a mature regulatory environment
• Single best mining jurisdiction in the U.S. and ranked 3rd globally by the respected "Fraser Institute's annual Survey of Mining Countries"
• Graded and maintained gravel roads link Silver Peak to the southern half of Clayton Valley
• Nearest rail system is in Hawthorne, Nevada, approximately 90 miles by road
• Public use airport in Tonopah with two runways
• Electrical connection is possible at the sub-station in Silver Peak
• Water supply is currently served by the Silver Peak municipal water supply
Lithium Timing and Why Now?:
Tesla Motors (NASDAQ: TSLA) is driving the current lithium boom in Nevada with the construction of a Gigafactory, a large-scale lithium-ion battery facility outside of Sparks Nevada. Market speculations of the likely construction of additional large-scale lithium battery factories in the region appears based on the potential of lithium batteries as all purposed energy storage units that are highly scalable.
The energy storage revolution is generating high demand for lithium with analysts forecasting demand increases for the product (Li) in the near future. Battery giants are scaling up lithium-ion production with mega-factories and are actively acquiring the raw material through off take agreements. Companies already producing lithium are attempting to increase production. Rockwood Holdings was purchased by Albemarle Corporation (NYSE: ALB) in 2014 for $6.2 billion USD. This purchase included the Rockwood Silver Peak Lithium Mine located in Clayton Valley, Nevada.
Tesla Motors is building a $5 billion USD battery gigafactory outside of Reno, Nevada. A large amount of the supply of lithium carbonate will have to come from the U.S. (i.e. Nevada's Clayton Valley production) because of the major tax incentives Tesla received ($1.3 billion USD in tax incentives over the next 10 years). Electric vehicles and energy storage has become a huge demand driver for the increased production at Clayton Valley and for the exploration and the discovery of additional lithium deposits in the area.
The most important use of lithium is in rechargeable batteries for mobile phones, laptops, digital cameras and electric vehicles. Lithium is also used in some non-rechargeable batteries for things like heart pacemakers, toys and clocks.
Lithium metal is made into alloys with aluminium and magnesium, improving their strength and making them lighter. A magnesium-lithium alloy is used for armour plating. Aluminium-lithium alloys are used in aircraft, bicycle frames and high-speed trains.
Lithium oxide is used in special glasses and glass ceramics. Lithium chloride is one of the most hygroscopic materials known, and is used in air conditioning and industrial drying systems (as is lithium bromide). Lithium stearate is used as an all-purpose and high-temperature lubricant. Lithium carbonate is used in drugs to treat manic depression, although its action on the brain is still not fully understood. Lithium hydride is used as a means of storing hydrogen for use as a fuel.
Robert Marvin, P.Geo., Exploration Manager for Cypress Development Corp. is the Qualified Person as defined by National Instrument 43-101 and has approved of the technical information on this web site.
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